Stop Funding Your Adult Child’s Lifestyle
Your adult child comes to you for financial help. What’s your response?
The adult child may be thinking: “They should help me—I deserve it. Mom and dad are fine financially, why shouldn’t they help me? I studied hard in school but I can’t find a job in my field. My roommates moved out and I can’t afford an apartment on my own.”
Mom and dad may be thinking: “We need to save for retirement. We did our job to help them grow up. Now they are an adult and should be taking care of themselves. They waste money on unnecessary purchases why should we waste our money helping them do that?”
How much you should help adult children is a loaded question, and it’s two sided. Our children grow up and become adults, but we never stop being parents and often it’s hard to know where to draw the boundary between helping and hurting.
The best financial gift you can give your children is to teach them how to be financially independent when they are young. Giving them more and more financial responsibility as they grow from toddlers to teens to adults provides a solid foundation for being on their own.
If you’re a parent who wants your adult child to be financially independent, start when they’re young. Teach them to budget, because budgeting skills are key to long-term financial independence. It’s a learned skill, not something that they will pick up on their own. Start small so they can learn and gain confidence as they grow up and take on more responsibility.
Even if you are paying for something when they’re teens, involve your child in budgeting. If you are paying for school clothes, give them an amount that can spend then allow them to spend it the way they choose. Or give them an amount they can spend on school lunches then let them manage the money. Don’t bail them out when they make mistakes. If they spend all their lunch money for the week on Monday, they’ll have to figure out how to eat lunch for the rest of the week without your help.
Teach them the difference between needs and wants. This goes along with budgeting, and learning the value of a dollar. Knowing the difference between needs and wants helps them map out a budget that takes care of the necessities before they blow money on something that is unnecessary
Define a transition plan. If your child will soon be leaving home, you may want to set up a deadline for financial independence, such as when they graduate from college and land their first job. Or you may want to implement a more gradual approach where you transition one financial obligation at a time. Whichever you decide to do it, have conversation to help them prepare for the transition. Your job is to be supportive but firm. Answer questions and give advice when asked but don’t bail them out if they miss a payment, incur a late fee or overdraft their bank account.
The transition plan needs to be clearly defined. There may be bills that make sense to pay jointly due to family plan discounts, such as a cell phone coverage. Or you may want to include the adult child in the family vacation without expecting them to contribute their fair share of the expenses. Or you may have saved money in a college fund that they can use for an advanced degree. Whatever it is that you are prepared to contribute to them, be sure to let them know.
This whole situation of how much to help adult children can be a very sticky subject between parents and children. It is important for both you and your spouse to be on the same page about what kind of financial assistance you may want to offer, how much and for how long. It can get even stickier when you consider there may be two married couples involved if your child has a spouse. The decision on how much to help is an art more than a science, which requires prayer and discernment.
Supporting your adult children financially for too long, means you may fall into one of two traps. First, it drains money that you should be directing toward your retirement savings. Second, the more you help them, the more dependent they become.
There are many families who can support an adult child financially, but it is still a good idea to help them learn to handle their own finances. You may be in a solid financial situation today, but that can change.
There are ways to help them financially without providing financial support. Treat them to dinner when you visit. Give gifts of cash on special (or not so special) occasions so they can splurge a little (such as sending a check along with the Valentine’s Day card.) If you are visiting them, buy groceries and include a few extras things they enjoy but can’t afford.
Remember that a gift is a gift. If you are going to give a cash gift, they get to spend it the way they want to spend it. If you have strings attached, then it really is not a gift. If you are helping them financially it is important to distinguish between a gift and something that has strings attached. Many hard feelings on both sides can be avoided by being sure this is understood clearly by both parties.
If an adult child runs into financial problems that are no fault of their own, how much should you help? There are a lot of factors to consider to answer that question. How much can the parents afford? Is the child going to work and contribute to the household expenses? Are they married and are grandchildren involved? Is the problem able to be solved relatively quickly?
I believe that we should do whatever we can to help our children when something challenging happens to them that is beyond their control. You just have to walk the fine line between spoiling them and helping them. Provide just enough to help them stay out of debt for basic needs
If your adult child is married, do not usurp the role of their spouse. Your advice is secondary to their spouse. Don’t use your money to control their lives. Encourage them to be dependent on God and each other.
Teaching children to handle money God’s way AS THEY GROW UP is part of a parent’s responsibility. If you really want what is best for your children, and if you want them to remember you as a good parent, keep in mind this verse from Proverbs 22:6 “Train up a child in the way he should go; even when he is old he will not depart from it.”
